Coinbase co-founder Fred Ehrsam didn’t hesitate to set lofty goals for his company entering 2014, as he quickly predicted his company would enroll no less than 10 billion-dollar businesses in its services before the year’s end.
It was a bold claim for the bitcoin merchant processor. At the time, Coinbase had enrolled just one billion-dollar merchant, Overstock.com, and despite enthusiasm that more would come aboard, months would pass without another major announcement.
Then, just as quickly, the company’s stable of major names expanded. In late May, the second billion-dollar merchant joined the ecosystem with the addition of satellite TV service provider DISH, and just as quickly, major brand names like Expedia and Dell followed suit.
To date, the bitcoin ecosystem has six billion-dollar merchants, and four of them accept payments through Coinbase. TigerDirect and Newegg accept bitcoin through Coinbase’s rival BitPay.
The man at the helm of this quick narrative turnaround is Adam White, the company’s business director. White oversees a team of four employees whose job it is to educate merchants about the benefits of bitcoin, and ultimately, to convince them that aligning with bitcoin is right for their brand.
White told CoinDesk that, across the board, he has seen his team’s conversations with major merchants become easier, remarking:
“They’re beginning to understand that it’s more than just a digital currency, that it’s more than a payment network, it’s a real bottom-line benefit to merchants and consumers.”
In a new interview with CoinDesk, White opened up about the company’s success with major merchants, delving into how this conversation is becoming easier for his team every day.
Starting the conversation
Using Dell as an example, White illustrated how Coinbase’s typical conversations with potential merchants proceed, often taking months of deliberation to complete.
White said that his team first reached out to Dell prior to the company’s decision to go private last October, and that Dell was specifically targeted because the company believed it had a customer base that would overlap with the average bitcoin user.
This led to follow-up conversations covering bitcoin’s basics, the benefits it could provide Dell, and how the integration would work.
The talks weren’t greeted with an initial green light, however. But that soon changed, according to White:
“They reached out to us a couple months later and said, ‘This is something that Michael Dell and our team want to do. We’re now a private company and have the flexibility to really respond to our customers’ needs, and this is something our customers really want. Can you help us turn this on ASAP?’ We said: ‘Absolutely’.”
From there, Dell took the lead on the integration, with Coinbase playing its typically supporting role, assigning a dedicated engineer to help Dell’s team understand the documentation and ensure the integration went smoothly.
Then and now
White said that when he joined Coinbase in October 2013, after departing his previous position as a product manager for gaming company Activision Blizzard, conversations with major merchants went much differently:
“At that point, it was difficult to point to other name-brand merchants and publicly traded companies like Overstock that were using bitcoin and actually show them here is real top-line revenue growth and bottom-line cost savings.”
It wasn’t just the addition of one company, however, that was solely responsible for the transition. Rather, he said that it was companies like Overstock and CheapAir – two of the company’s larger, early clients – that were able to demonstrate real success in taking bitcoin payments. White added:
“Now, we’re showcasing those results and it really helps change that conversation from what could be to what’s been happening, and we’re able to, in a general sense, model out what the impact would be and it helps the merchant assess their opportunity cost.”
Notably, CheapAir recently announced it passed $1.5m in total bitcoin payments processed, while Overstock is expected to soon expand bitcoin to its global customers.
White went on to say that success stories like these are helping more merchants to understand the opportunity of accepting bitcoin, and to look at Coinbase as a partner.
“I think when they take that closer look, they really get excited about it. It eliminates risks like chargebacks, fraud, credit card scams, and now they’re realizing there’s a way to work around that and that bitcoin is the best solution for it,” he said.
Emphasizing overall adoption
White said that although the exposure provided by billion-dollar merchants does benefit the entire community, Coinbase doesn’t necessarily emphasize these businesses over others that may more broadly spur overall enrollment.
For example, he said, platforms like Spree and Shopify that allow thousands of smaller businesses to benefit from bitcoin are just as important as billion-dollar merchants.
“While we hope to bring on those billion-dollar merchants, it’s important for us also to bring on billion-dollar platforms and sites that favor the mass adoption of bitcoin,” White said, adding:
“At the end of the day, we want to bring bitcoin to as many merchants as possible.”
Image via Coinbase